Chp 2. Achieving Strategic Fit and Scope

How is strategic fit achieved?

1. understanding the customer and supply chain uncertainty 2. understanding the supply chain 3.achieving strategic fit

agile intercompany scope

a firm's ability to achieve strategic fit when partnering with supply chain stages that change over time

strategic fit

competitive and supply chain strategies have aligned goals.

competitive strategy

defines the set of customer needs a firm seeks to satisfy through its products and services

supply chain strategy

determines the nature of material procurement, transportation of materials, manufacture of product or creation of service, distribution of product.

step 3; achieving strategic fit

ensure that the degree of supply chain responsiveness is consistent with the implied uncertainty, assign roles to different stages of the supply chain that ensure the appropriate level of responsiveness, ensure that all functions maintain consistent strategies that support the competitive strategy.

step 2; understanding supply chain capabilities

how does the firm best meet demand?

interfunctional scope

maximize company profit

intercompany scope

maximize supply chain surplus

intraoperation scope

minimize local cost view

intrafunctional view

minimize total functional cost

step 1; understanding the customer and supply chain uncertainty

quantity of product needed in each lot, response time, variety of products needed, service level required, price of the product, desired rate of innovation in the product

supply chain responsiveness is the ability to

respond to wide range of quantities demanded, meet short lead times, handle a large variety of products, build highly innovative products, meet a very high service level

implied demand uncertainty

resulting uncertainty for the supply chain given the portion of the demand the supply chain must handle and attributes the customer desires.

cost-responsiveness efficient frontier curve

shows the lowest possible cost for a given level of responsiveness

marketing and sales strategy

specifies how the market will be segmented and product positioned, priced, and promoted

product development strategy

specifies the portfolio of new products that the company will try to develop

scope of strategic fit

the functions within the firm and stages across the supply chain that device an integrated strategy with an aligned objective.

demand uncertainty

uncertainty of customer demand for a product